Correlation Between Highway Holdings and Minerals Technologies
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Minerals Technologies at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Highway Holdings and Minerals Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highway Holdings Limited and Minerals Technologies, you can compare the effects of market volatilities on Highway Holdings and Minerals Technologies and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Highway Holdings with a short position of Minerals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Minerals Technologies.
Diversification Opportunities for Highway Holdings and Minerals Technologies
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Highway and Minerals is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Minerals Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerals Technologies and Highway Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Highway Holdings Limited are associated (or correlated) with Minerals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerals Technologies has no effect on the direction of Highway Holdings i.e., Highway Holdings and Minerals Technologies go up and down completely randomly.
Pair Corralation between Highway Holdings and Minerals Technologies
Given the investment horizon of 90 days Highway Holdings is expected to generate 111.41 times less return on investment than Minerals Technologies. But when comparing it to its historical volatility, Highway Holdings Limited is 2.7 times less risky than Minerals Technologies. It trades about 0.0 of its potential returns per unit of risk. Minerals Technologies is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 7,644 in Minerals Technologies on August 29, 2024 and sell it today you would earn a total of 676.00 from holding Minerals Technologies or generate 8.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highway Holdings Limited vs. Minerals Technologies
Performance |
| Timeline |
| Highway Holdings |
| Minerals Technologies |
Highway Holdings and Minerals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and Minerals Technologies
The main advantage of trading using opposite Highway Holdings and Minerals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Minerals Technologies can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Minerals Technologies will offset losses from the drop in Minerals Technologies' long position.| Highway Holdings vs. Dave Warrants | Highway Holdings vs. Evolv Technologies Holdings | Highway Holdings vs. Aquagold International | Highway Holdings vs. Morningstar Unconstrained Allocation |
| Minerals Technologies vs. Oil Dri | Minerals Technologies vs. H B Fuller | Minerals Technologies vs. Northern Technologies | Minerals Technologies vs. Cabot |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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